Brussels (Brussels Morning) – The European Commission is launching a hydrogen pilot mechanism to boost the European hydrogen market, improve market transparency, and accelerate investments, supporting the EU’s Green Deal and decarbonisation goals.
The European Commission has announced that it is taking further measures to support the development of the European hydrogen market by undertaking work on a pilot mechanism. The new mechanism was developed under the recently adopted decarbonised gases and hydrogen package and seeks to accelerate investments by delivering a clearer picture of the market condition of both off-takers and suppliers and encouraging contact between them. It will be in standing for five years and will be characteristic of the European Hydrogen Bank.
What Are the Goals of the EU’s Hydrogen Pilot?
EU Commission states that the hydrogen pilot means will collect, process and give access to information on demand and supply for renewable, low-carbon hydrogen and derivatives, letting European off-takers correspond with both European and foreign suppliers. It will organise and process market data on the development of hydrogen discharges and prices. A procurement process has begun to locate a service provider to develop an IT platform to employ the pilot mechanism.Â
What Are the Goals of the EU’s Hydrogen Pilot?
In Europe, the first large-scale electrolysers are already under building and the first off-take contracts have been signed. Improving demand visibility between suppliers and consumers will assist in accelerating final investment findings in Europe and contribute to ensuring off-take agreements. Hydrogen will play an essential role in fulfilling Green Deal targets, phasing out Russian fossil fuels, and sustaining the decarbonisation and competitiveness of European industry.
The pilot hydrogen mechanism creates part of the Commission’s ongoing work to install a European Multiproduct Platform for the joint purchase of strategic commodities, which, in the hereafter, could substitute commodities such as strategic raw materials.
The EU has set in place a sweeping and integrated regulatory framework to sustain the development of a completely functioning hydrogen market by 2030. The Decarbonised Gases and Hydrogen package outlines clear market rules, delivering legal certainty and long-term visibility to investors across the whole hydrogen value chain. On the demand side, the modified Renewable Energy Directive raised targets for renewable hydrogen in the industry and transport sectors.Â
The EU has also formed rules to determine what renewable hydrogen is and how it can lean towards these targets, and the Commission intends to propose a legal definition of low-carbon hydrogen by the end of the year. In addition, hydrogen supply chain schemes are now considered of strategic interest, and thus suitable for faster permitting and other supportive actions, under the Net-Zero Industry Act.
How Will the EU’s Hydrogen Pilot Ensure Market Transparency?
In addition to the enabling regulatory framework, the Commission has been sustaining the development of hydrogen infrastructure and connected investments. The first Union list of schemes of Common and Mutual Interest under the modified TEN-E Regulation contains several hydrogen corridors that are anticipated to connect consumers with producers from across the EU as well as internationally. More particularly, the list gives PCI position to a set of new and repurposed pipelines, 16 large electrolysers of more than 50 MW, as well as hydrogen storage buildings and terminals.
What Are the Key Features of the EU’s Hydrogen Pilot Mechanism?
The Commission has also launched the European Hydrogen Bank to increase investments in hydrogen projects and promote the establishment of a full hydrogen value chain in Europe. The first domestic auction was a win, receiving 132 proposals, out of which seven have been chosen to receive nearly €720 million in financial backing from the Innovation Fund. The Commission plans to establish a second domestic auction by the end of this year and is operating on developing possible international auctions in collaboration with the Member States.
